A top Egyptian army financial official said on Thursday the budget deficit will climb further, which could prompt a review of gasoline and other subsidies,
"By end of January of next year foreign reserves will go down to $15 billion," Mahmoud Nasr, the head of the military financial authority, said at a briefing on the economy. The central bank put reserves at $22 billion at the end of October, a level economists have said already offered limited firepower to cope with a looming currency crisis.
"Only $10 billion will be available," Nasr said, adding that $5 billion was already committed in payments to foreign investors or other obligations.
Meanwhile, Egypt’s benchmark stock index extended its gains for a third consecutive day Thursday after landmark parliamentary elections passed relatively peacefully. Few, however, expected the rally to endure amid the country’s lingering political uncertainty and its growing economic problems.
The Egyptian Exchange’s EGX30 index closed almost 1.7 percent higher, climbing to 4,087 points. The index posted gains slightly under 1 percent on Wednesday and surged almost 5.5 percent on Tuesday. Even so, it has lost about 42 percent so far this year, making it one of the world’s worst performing.
The market’s climb following the first phase of the vote for the lower house of Parliament earlier this week offered a rare bit of good news for the Arab world’s most populous nation, whose economy has endured a heavy hammering in the nearly 10 months since the popular uprising that ousted former President Hosni Mubarak.
